Value Maximization and Decision Support (VMDS)

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Value Maximization and Decision Support (VMDS) Jean Favreau, Research manager, Pointe-Claire Presented by Yu (Vivian) Li, Researcher, Vancouver December 3 rd, 2014

Access to R&D knowledge from 400+ R&D Staff Covering the Full Forest Value Chain Market Pulp Paper, Packaging & Consumer Products Inventory Cellulosic Biomaterials Resource Attributes Wood Biomaterials Harvesting Systems Biorefinery & Energy Road & Transportation Environment & Sustainability Fiber Supply PIT Wild Fire Operations Advanced Building System EWP Manufacturing Secondary Manufacturing 2 2014 2013 FPInnovations. All Tous rights droits reserved. réservés. Copying Reproduction and redistribution et diffusion prohibited. interdites. Les FPInnovations, marques et les its logos marks de and FPInnovations logos are trademarks sont des of marques FPInnovations. déposées de FPInnovations

VMDS Program Objectives Develop strong market pull industrial behavior Direct the fiber at the right process facility at the right time in the right form Take advantage of the unique attribute of the fiber Optimize the entire value chain from resource to market Improve efficiency of the manufacturing sector 3 2014 2013 FPInnovations. All Tous rights droits reserved. réservés. Copying Reproduction and redistribution et diffusion prohibited. interdites. Les FPInnovations, marques et les its logos marks de and FPInnovations logos are trademarks sont des of marques FPInnovations. déposées de FPInnovations

VMDS Main Research Themes Better fibre supply for the industry Improved value-based modules in FPInnovations DSS tools Innovative tools to improve product flow efficiency Agile and efficient manufacturing Integration of NSERC VCO Network output 4

1. Better supply Strategies to apply the right fibre is sent to the right mill at the right time at the right cost Complex planning decisions with better planning tools (e.g. net value of forest stands, wood allocation, scheduling, better forest inventory) 5 2014 2013 FPInnovations. All Tous rights droits reserved. réservés. Copying Reproduction and redistribution et diffusion prohibited. interdites. Les FPInnovations, marques et les its logos marks de and FPInnovations logos are trademarks sont des of marques FPInnovations. déposées de FPInnovations

BC Bioeconomy - Fort St. James study Objective: map distribution of different categories of fibre (sawlog, pulpwood, biomass) over large areas Green stands, no Lidar tree heights 211 plots Sampling intensity: 200 m (direction of main change) * 400 m. Total area approx. 2,000 ha Digital air photos to be available in 2015

BC Bioeconomy - Fort St. James study Total sawlog volume (pine l., spruce, and balsam) at each plot (m 3 /ha) Digital Elevation Model (TIN representation) and location of the 211 plots

BC Bioeconomy - Fort St. James study Map depicting the probability that sawlog volume > 200 m 3 /ha Total sawlog volume interpolated over the study area (m 3 /ha)

2. Value tools Provide tools to help streamline supply chains and maximize value from available fibre Develop practical, functional models for the industry considering the entire value chain Provide tools to help companies evaluate and leverage new bioproduct opportunities Propose ( push ) new solutions to the industry to transform business model 9 2014 2013 FPInnovations. All Tous rights droits reserved. réservés. Copying Reproduction and redistribution et diffusion prohibited. interdites. Les FPInnovations, marques et les its logos marks de and FPInnovations logos are trademarks sont des of marques FPInnovations. déposées de FPInnovations

ForestPlan Approach Use ForestPlan to determine the optimal harvest and log allocation plan based on sawmill needs at Tembec Populate ForestPlan with forest, road and sawmill data Evaluate the impact of lumber market fluctuations on log allocation decisions to sawmills Expected benefits Potential benefits identified in a case study on BC Coast are approx. $1.5/m³

3. Products flow Solutions to provide efficient fibre flow New tools to manage larger product mix with shorter lead time and make strategies to bring fibre from far or remote areas Better use of truck fleet and drivers to supply mills and to overcome a lack of manpower Support implementation of efficient multimodal transportation systems 11 2014 2013 FPInnovations. All Tous rights droits reserved. réservés. Copying Reproduction and redistribution et diffusion prohibited. interdites. Les FPInnovations, marques et les its logos marks de and FPInnovations logos are trademarks sont des of marques FPInnovations. déposées de FPInnovations

Transportation Logistics Transportation interacting with upstream and downstream activities Demand Forest Forest operations Inventory Transport Mill Market Three main decisions 1. Allocation (Where) 2. Routing (How) 3. Scheduling (When) Information Optimization Simulation 12 2014 2013 FPInnovations. All Tous rights droits reserved. réservés. Copying Reproduction and redistribution et diffusion prohibited. interdites. Les FPInnovations, marques et les its logos marks de and FPInnovations logos are trademarks sont des of marques FPInnovations. déposées de FPInnovations

FPInterface TM GIS-based simulation model to assess hauling cost. A tool to analyze tactical and operational plans. 13 2014 2013 FPInnovations. All Tous rights droits reserved. réservés. Copying Reproduction and redistribution et diffusion prohibited. interdites. Les FPInnovations, marques et les its logos marks de and FPInnovations logos are trademarks sont des of marques FPInnovations. déposées de FPInnovations

FPInterface TM -- MaxTour Optimizes transport by: Determining the backhaul potential by sector Calculating the savings by company/product Identifying the best routes Evaluating the viability of solutions Mill A Mill B Establishing transport rates for complex situations Implementing in Canfor and Resolute Forest Products to identify backhaul opportunities and reduce transportation cost Mill C Loaded Truck 1 Empty Reduce 10-20 % of empty travel distances Reduce 2-7 % of total transport cost

Truck Scheduler (TS) Optimizes transport by: Minimizing queuing time (waiting time) for log trucks Determining the back haul opportunities Increasing driver satisfactory of working hours/shifts Tracking every driver s schedule at every 20 mins Forest Forest operations Roadside Inventory Transport Mill Market TSC: Truck Scheduler for Company TSD: Truck Scheduler for Drivers

K335 K249 K334 K188 KT155 K153 K517 KT580 K107 A K307 A K333 KT115 K439 K516 A K147 K513 K504 K102 KT118 K186 A K433 A K501 KT24 K331 KT131 K149 A K313 K146 K242 K189 K141 KT610 K151 K332 K231 KT577 KT23 KT142A K432 A K431 K506 A KT21 KT130 KT02 Supply and demand CSV results files Contractor assumptions Matrix travel distance Model parameters Gantt Charts Dashboard Truck Scheduler: Improve Log Truck Utilization Determine the schedule of trucks over a period of time (e.g. one week) in Weyerhaeuser to: Minimize transportation cost (loaded and empty trips) Minimize the cost associated with waiting time of trucks and loaders at the mill and in the forest. KPIs 200 150 100 50 35 30 25 20 0 Forest to mill Create CSV file Operational parameters Input Driving time empty Driving time loaded Contractor assumptions Dem. Satisf. Payload Mill demand Supply sector 89% Hours / Truck 62 h/week Mathematical parameters Mill to mill Driving time empty Driving time loaded Contractor availability Loader schedule Inventory Av. Trsp Cost 5,75 $/m³ Fleet Utilization (Detailed) Optimize Logistics Dashboard Fleet Utilz. 25% Inventory Truck Planning Site Planning Comments/Notes : Demand Plan Inventory Plan Loader Plan (Mill) Period KPIs Shifts Plan Dashboard Import results Mill Planning Shipment Plan Supply Loaders Transportation Plan Trucks KPIs Trucks Plan Period : 1 2 3 4 5 1 2 3 4 5 January 0 Re 0 7095 14190 21285 28280 0 Elko Sawmill Wh 1750 2009 2150 1450 0 0 Wh 0 156 503 509 1865 0 Radium Wh Sawmill 2846 2294 2650 2988 0 1 Re 0 0 1131 1562 2493 0 Radium Re Sawmill 12226 12500 11550 11702 0 2 Re 0 5762 11174 16986 22748 0 Canal Flats Re Saw mill 11905 15826 11550 11350 0 Fleet Utilization Trend 3 Re 0 171 242 413 534 0 Kootenay Pu Operation 2850 2900 2800 1950 0 1 2 3 4 12,75 12,75 0 32,5 50% 40% 30% 20% 10% 0% 70000 60000 50000 40000 30000 20000 10000 0 4 Re 0 126 2 128 254 0 Kootenay ReOperation 626 1850 800 250 0 5 Re 0 2450 4700 7400 10100 0 Elko PulpPu 2600 2800 3250 1200 0 7 Re 0 3243 6486 9729 12972 0 0 0 0 0 0 0 12 Re 0 2686 5372 8058 10744 0 0 0 0 0 0 0 1030 Re 0 187 474 511 748 0 0 0 0 0 0 0 Mill Supply 120000 100000 80000 60000 40000 20000 0 Truck Scheduling 40 DRIVING EMPTY (%) DRIVING LOADED (%) LOADING (%) UNLOADING (%) WAITING (%) Loaders Utlization Ratio Attained Vol Missed Vol Dashboard Attained Vol Missed Vol Dock Scheduling 16

Thank you Yu (Vivian) Li Researcher Value Maximization/Decision support 604-222-5629 yu.li@fpinnovations.ca Follow us on www.fpinnovations.ca